Attero Recycling shapes up for the next round with direct-to-consumer play

Over the next few months, Rohan Gupta and Nitin Gupta, founders of Noida-based Attero Recycling, will criss-cross the country setting up 20-odd electronic waste collection centers. Their objective is to make it easier for consumers to dispose off their old mobile phones, laptops and other obsolete electronic products in a responsible fashion. The Gupta siblings hope to take the lead in changing consumers’ recycling habits and in the process eke out a broader market for their nearly five-year old ewaste recycling company.

“Ideally, we should have at least one collection center in each city. For now we’ve set ourselves the target of between 20 and 50, in the medium term,” says Rohan Gupta, in a telephonic conversation with StartupCentral. The company currently operates in 150-odd cities, including in the remote North Eastern states, but primarily works directly with enterprise customers.

Some of the impetus to go direct-to-consumer comes from a recent government directive that now makes it illegal to dump electronic products as garbage or sell them to the scrap dealer down the street. Under the guidelines of the Electronic Waste (Management & Handling) Rules 2011, consumers are now required to send their old mobile phones, laptop computers and other electronic items either to the original manufacturer or to an authorized ewaste recycler.

Nice move but tough to implement

This is easier said than done. “You need to have a vast network of collection depots for this to work effectively. It is not clear yet who will bear that cost. It is also not clear whether OEMs (original equipment manufacturers) will incentivize consumers to send old products back for recycling,” says Gupta. The government directive makes it mandatory for OEMs to accept products returned by consumers. However, it does not specify targets for OEMs, in terms of the quantum of obsolete products that they must collect within a specific period.

As a consumer, if a OEM refuses to collect your old laptop or mobile phone, you can complain to the Pollution Control Board. Non-compliance on the OEM’s part will result in fines or imprisonment. The government additionally lists 73 authorized ewaste recyclers across the country, Attero included, that can be contacted by consumers. However, as Gupta puts it, “There are probably only five or six good quality recyclers on that list.”

By good quality Gupta implies the process that a recycler employs to dispose off waste. At its 100,000 square feet factory (image below) in Roorkee, Uttaranchal, Attero puts the ewaste through a process that extracts iron, non-ferrous metals and plastic. Precious metals such as copper, nickel, zinc and lead are further separated and recycled. The left over waste is disposed off in government-approved landfill sites. Apart from Attero, only a handful of companies, including Mumbai-based Eco Recycling and Global E-Waste Management and Services in Chennai, follow similar end-to-end processes.

That limits the options available to even the small population of consumers who are willing to recycle responsibly. The 73 authorized recyclers combined would be ill-equipped to deal with the country’s current ewaste volumes — 800,000 tonne in 2012, by government estimates. According to some industry estimates about 70 per cent is generated by businesses, while the balance comes from individual consumers. But, these estimates only take into account televisions, laptop computers, mobile phones and other such items and not white goods such as refrigerators and air conditioners, says Gupta. The actual volumes generated by individual consumers, he reckons, are probably much higher.

Big challenges, bigger opportunities

While the challenges are huge, primary among those being the existence of a large and tenacious unorganized market, Attero also see an opportunity to take ewaste recycling mainstream. “The government directive opens up new ground for us on the consumer front,” he says.

In fact, Attero started working towards going direct-to-consumer much before the ewaste regulations came into force. Last July, the company launched a service called Atterobay, an online platform where consumers can sign up to recycle their mobile phones. Attero buys the phones from consumers at real-time exchange rates, picks them up from consumers’ homes and dispatches payments via cheques or vouchers. The response to the new service has been fairly decent. Since its launch, the site has already collected about 20,000 phones and Gupta plans to introduce a scheme for laptops soon.

The 20 or 50 physical collection centers that the company plans to set up over the next few months will make Atterobay more easily accessible to consumers. The initiative though comes at a fairly significant cost. Apart from the collection centers, it involves setting up warehouses, a robust information technology backbone to manage logistics and people to man the operations. The company expects to end up investing a little under $1 million in setting up the backend infrastructure to manage the operation. Part of the investment will be recovered from refurbishing and re-selling a portion of the mobile phones that it collects through Atterobay.

Despite the costs involved, it is important for Attero to break into the consumer market. Though its revenue mainstay (numbers were not disclosed) is the corporate sector, the volumes are still not meaningful relative to the potential opportunity. “Corporate organizations have begun to realize the benefits of recycling but they still have a long way to go. Even multinationals here behave differently than they would in Europe or the US when it comes to recycling ewaste,” says Gupta.

The numbers speak for themselves — in the last financial year, the company processed 4,000 tonne of ewaste. About 70 per cent of the company’s revenues currently come from private sector companies. The government sector accounts for another 20 per cent and the rest comes from the banking and financial services sector. Gupta says that the company broke even in the last financial year.

Fortunately, funds are not an issue for the company at this stage. So far, it has raised $14.6 million in venture capital over multiple rounds. It raised $6.3 million as its Series A round of funding from IndoUS Venture Partners and Draper Fisher Jurvetson in 2008. This was followed by a $8.3 million Series B round from International Finance Corporation, Granite Hill and existing investors in 2010. The seed capital for the venture came from the founders’ personal resources. “We’ve also applied for carbon credits. Cash flows are healthy at this stage,” says Gupta and adds that the company is not looking to raise fresh capital in the medium term.

Meanwhile, we decided to check out Atterobay. Our query for the exchange price of a Nokia e72 resulted in a quote of Rs 5,240, if payment is by voucher, or Rs 4,192 in cash. It matches what the local mobile phone vendor down the street had offered two weeks ago. The process is super-smooth and convenient. We’ll take the offer.

Images Courtesy: Attero Recycling